Traditional Movie Theater Ticket Sales Peaked in 2007
The seeds of today's collapse in movie theater employment have been coming for a long time. In 2015, there were 1.32 billion movie tickets sold in Canada and the United States, according to the Motion Picture Association of America. By 2019, only 1.25 billion movie tickets were sold in North America. The industry's peak sales year — 1,420 billion in 2007 — keeps fading further into history. Even as ticket sale volumes have fallen, the population is increasing, and more people have access to other entertainment forms.
In a way, the pandemic crisis has only accelerated existing trends in the industry. Just think back to one of the most controversial movie releases in recent years.
A Turning Point in Movie History with “The Irishman”
Martin Scorsese's film "The Irishman" first grabbed headlines in 2019 because of its unique distribution plan. The film had a hybrid release, including a small-scale theatrical release on November 1, 2019 followed by a Netflix release on November 27, 2019.
Before "The Irishman," was released to theaters, no major film had been distributed so quickly to a streaming service. The film's limited release to theaters had an expected effect: it drove up prices for movie tickets to more than $100 in some cases in New York, much higher than the typical 2019 movie ticket price of $9.26.
New Multi-Billion Dollar Players in TV and Movies
In the early years, video streaming services focused mainly on buying distribution rights from other companies. Netflix has since become a significant player in production. In 2019 alone, Netflix spent approximately $15 billion on original content alone, with new series being created in America, France, Canada, and other countries.
Netflix is now outspending the traditional giants of television. CBS, which spent about $8 billion on new shows in 2019, is still ahead of Amazon which spent $6.5 billion on original content. With more than 182 million active subscribers worldwide, Netflix has direct access to customers, which movie theaters never had.
Streaming Services Are Preserving Some Jobs
It's unlikely that streaming services will replace most of the jobs lost to recent movie theater closures. Some potential losses may be averted if Amazon's move to resurrect "The Expanse" TV series is repeated in the movie industry.
In 2018, Syfy canceled "The Expanse," a popular science fiction series based on the same name's best-selling novels. Alcon Television Group, the producer of the series, had the option to take the series elsewhere. Following a fan campaign with more than 100,000 supporters to #SaveTheExpanse, Amazon announced it would take over the series.
Similar campaigns may yet happen for movies with a massive fan following as could be the case with the delayed release of "The Batman." Netflix, Apple, or another streaming service might be interested in the distribution opportunity. Disney, which purchased Marvel for $4 billion in 2009, may want to build its movie empire by acquiring rights to DC characters like Batman and Superman, even as the numbers of movie theaters decline.
The Movie Industry Can Learn From the Music Industry
As of the fall of 2020, hundreds of movie theaters are closing in the United States. It is unclear when or how movie theater attendance will increase again. Ultimately, the movie distribution industry may face the same fate as music.
In 2006, Tower Music closed its 200 locations in the United States, which meant thousands of job losses. However, independent music stores have found ways to recover. From a record low of 2,000 music stores, this category had grown to 2,400 stores by 2017. Niche specialization, such as emphasizing vinyl music's appeal, is partially responsible for the revival of music retail stores. Once considered completely obsolete in the face of digital music, vinyl music sold 13 million units in 2016 alone.
About the Author
Bruce Harpham is an author and marketing consultant based in Canada. His first book "Project Managers At Work" shared real-world success lessons from NASA, Google, and other organizations. His articles have been published in CIO.com, InfoWorld, Canadian Business, and other organizations. Visit BruceHarpham.com for articles, interviews with tech leaders, and updates on future books.